Murdoch defends DirecTV purchase

By Marilyn Geewax in WashingtonMay 24 2003

US consumers had nothing to fear from Rupert Murdoch, the Australian-born media baron told legislators on Thursday.

At a Senate Commerce Committee hearing into the growing reach of media giants, the News Corp chairman and chief executive defended his company's plan to purchase DirecTV, the nation's largest satellite television provider.

"This acquisition has the potential to profoundly change the multichannel video marketplace in the United States to the ultimate benefit of all pay-TV customers," Mr Murdoch said. "There will be no decrease in the number of US competitors."

The hearing was one in a series on media ownership. Both sides of US politics have become increasingly concerned about the concentration of media power because the Federal Communications Commission plans to vote on easing long-standing ownership rules on June 2.

FCC chairman Michael Powell and his two fellow Republicans on the five-member commission are expected to approve changes that will allow media companies to own more TV stations in local markets, and permit more combinations of local newspapers, TV and radio stations in the same market. ");document.write("

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But consumer advocates, writers, musicians and other artists fear that media conglomerates such as News Corp, which owns Fox and Fox News Channel, already have too much control over what Americans see and hear.

If News Corp were allowed to complete its proposed deal with DirecTV, it would "threaten to seriously harm meaningful competition between media companies", Mr Kimmelman told the Senate panel.

News Corp is seeking regulatory approval to buy 34 per cent of Hughes Electronics, the division of General Motors that runs DirecTV. The deal, announced in April, is valued at $6.6 billion ($10 billion).

Mr Murdoch argues that the merger will provide consumers with more local TV stations and better high-speed internet access.

Just last year, the FCC squashed a deal between DirecTV and its chief competitor, EchoStar.

But the environment for media mergers could become easier as Mr Powell pushes for a broad rethink on ownership restraints. He argues that many rules have become outdated in an age when the internet, cable and satellite offer Americans an array of news and entertainment sources.

The FCC's two Democrats want Mr Powell to delay the vote to allow more public hearings on media restrictions.

Mr Powell has refused to back down. Earlier this week, Commerce Secretary Donald Evans said he supported the decision to go ahead with the vote, but said the Bush Administration was not promoting any particular outcome.